IFRS Financial Results for the Fiscal Year Ended March 31, 2018

Terumo Corporation IFRS Financial Results for the Fiscal Year Ended March 31, 2018

4. Consolidated Financial Statements ① Consolidated Statements of Financial Position （Unit: Millions of yen） As of As of As of April 1, 2016 March 31, 2017 March 31, 2018 Assets Current assets Cash and cash equivalents 146,927 105,046 167,832 Trade and other receivables 105,270 111,090 121,402 Other current financial assets 3,149 625 659 Inventories 95,280 106,046 112,064 Current tax assets 2,106 750 530 Other current assets 5,819 7,375 8,421 Total current assets 358,553 330,934 410,912 Non-current assets Property, plant and equipment 165,554 172,644 179,196 Goodwill and intangible assets 294,767 471,616 442,660 Investments accounted for using the 5,955 5,717 5,710 equity method Other non-current financial assets 41,154 13,651 13,815 Deferred tax assets 19,788 24,019 23,356 Other non-current assets 3,716 3,679 3,328 Total non-current assets 530,938 691,328 668,068 Total assets 889,491 1,022,262 1,078,981

（Unit: Millions of yen） As of As of As of April 1, 2016 March 31, 2017 March 31, 2018 Liabilities and Equity Liabilities Current liabilities Trade and other payables 55,485 61,152 67,515 Bonds and borrowings 59,901 127,853 47,436 Other current financial liabilities 444 370 407 Current tax liabilities 11,341 11,115 15,970 Provisions 115 212 198 Other current liabilities 43,884 49,433 47,483 Total current liabilities 171,172 250,137 179,013 Non-current liabilities Bonds and borrowings 157,172 210,335 288,776 Other non-current financial liabilities 1,455 10,724 15,452 Deferred tax liabilities 39,549 40,093 24,124 Retirement benefit liabilities 10,256 8,650 10,063 Provisions 230 84 82 Other non-current liabilities 9,323 10,712 11,032 Total non-current liabilities 217,987 280,602 349,532 Total liabilities 389,160 530,739 528,545 Equity Share capital 38,716 38,716 38,716 Capital surplus 52,478 52,478 52,445 Treasury stock (64,040) (108,225) (101,546) Retained earnings 459,264 513,578 588,932 Other components of equity 13,803 (5,126) (28,240) Total equity attributable to the owners of 500,221 491,421 550,307 the parent Non-controlling interests 109 101 128 Total equity 500,331 491,522 550,435 Total liabilities and equity 889,491 1,022,262 1,078,981

② Consolidated Statements of Profit or Loss （Unit: Millions of yen） For the fiscal year ended For the fiscal year ended March 31, 2017 March 31, 2018 Revenue 514,164 587,775 Cost of sales 240,329 268,442 Gross profit 273,835 319,333 Selling, general and administrative expenses 183,288 212,363 Other income 2,789 4,764 Other expenses 5,559 3,180 Operating profit 87,777 108,552 Finance income 709 1,089 Finance costs 13,228 2,792 Share of the profit of investments accounted (377) (218) for using the equity method Profit before tax 74,881 106,630 Income tax expenses 19,989 15,429 Profit for the year 54,891 91,201

Attributable to: Owners of the parent 55,003 91,295 Non-controlling interests (111) (94) Total profit for the year 54,891 91,201

Earnings per share Basic earnings per share (yen) 152.31 259.12 Diluted earnings per share (yen) 142.75 242.06

Consolidated Statements of Profit or Loss (Under JGAAP) （Unit: Millions of yen） For the fiscal year ended For the fiscal year ended March 31, 2017 March 31, 2018 Net sales 514,164 587,775 Gross profit 278,000 327,226 Operating income 76,578 92,232 Ordinary income 68,552 88,467 Profit attributable to the owners of the parent 54,225 75,590

③ Consolidated Statements of Comprehensive Income

（Unit: Millions of yen） For the fiscal year ended For the fiscal year ended March 31, 2017 March 31, 2018 Profit for the year 54,891 91,201

Other comprehensive income Items that will not be reclassified to profit or loss Changes in financial assets measured at fair (1,412) 298 value through other comprehensive income Remeasurements of defined benefit plan 2,969 (46) Total items that will not be reclassified to profit 1,556 252 or loss

Items that will be reclassified to profit or loss Exchange differences on translation of foreign (6,321) (24,395) operations Cash flow hedges (479) 2 Hedging costs 33 607 Share of other comprehensive income/(loss) of investments accounted for using the equity (0) (1) method Total items that will be reclassified to profit or (6,768) (23,787) loss Other comprehensive income/(loss) for the year (5,211) (23,534) Total comprehensive income for the year 49, 680 67,666

Attributable to Owners of the parent 49,798 67,774 Non-controlling interests (118) (108) Total comprehensive income for the year 49,680 67,666 (Note) Items in the above statement are net of tax.

④ Consolidated Statements of Changes in Equity （Unit: Millions of yen） Equity attributable to the owners of the parent Other Non-contro Share Capital Treasury Retained components of Total lling Total equity capital surplus stock earnings equity interests

Balance at April 1, 2016 38,716 52,478 (64,040) 459,264 13,803 500,221 109 500,331 Profit for the year －－－ 55,003 － 55,003 (111) 54,891 Other comprehensive －－－－ (5,205) (5,205) (6) (5,211) income Total comprehensive income －－－ 55,003 (5,205) 49,798 (118) 49,680 Acquisition of treasury －－ (44,227) －－ (44,227) － (44,227) stock Disposal of treasury stock －－ 41 (18) (22) 0 － 0 Dividends －－－ (14,518) － (14,518) － (14,518) Transfer from other components of equity to －－－ 13,848 (13,848) －－－ retained earnings Change in shares of subsidiaries due of capital －－－－－－ 110 110 increase Share-based payments －－－－ 147 147 － 147 Total transactions with the －－ (44,185) (689) (13,724) (58,599) 110 (58,488) owners of the Company Balance at March 31, 2017 38,716 52,478 (108,225) 513,578 (5,126) 491,421 101 491,522 Profit for the year －－－ 91,295 － 91,295 (94) 91,201 Other comprehensive －－－－ (23,520) (23,520) (14) (23,534) income Total comprehensive income －－－ 91,295 (23,520) 67,774 (108) 67,666 Acquisition of treasury －－ (6) －－ (6) － (6) stock Disposal of treasury stock －－ 109 (19) (90) 0 － 0 Dividends －－－ (15,839) － (15,839) － (15,839) Transfer from other components of equity to －－－ (50) 50 －－－ retained earnings Change in shares of subsidiaries due of capital －－－－－－ 135 135 increase Share-based payments －－－－ 447 447 － 447 Conversion of convertible － (33) 6,576 (33) － 6,509 － 6,509 bonds Total transaction with the － (33) 6,679 (15,942) 406 (8,889) 135 (8,753) owners of the Company Balance at March 31, 2018 38,716 52,445 (101,546) 588,932 (28,240) 550,307 128 550,435

⑤ Consolidated Statements of Cash Flows （Unit: Millions of yen） For the fiscal year ended For the fiscal year ended March 31, 2017 March 31, 2018 Cash flows from operating activities Profit before tax 74,881 106,630 Depreciation and amortization 34,471 42,035 Share of the loss/(gain) of investments accounted for 377 218 using the equity method (Decrease) /increase in retirement benefit liabilities 2,876 2,204 Interest and dividend income (701) (855) Interest expenses 1,709 1,805 Foreign exchange (gain)/loss 2,881 616 (Gain)/Loss on disposal of property, plant and equipment 1,293 557 (Profit)/Loss on valuation of financial instruments 6,984 － (Increase)/decrease in trade and other receivables (4,718) (9,256) (Increase)/decrease in inventories (4,182) (7,537) Increase/(decrease) in trade and other payables 886 3,991 Others (7,875) (1,639) Sub-total 108,883 138,770 Interest and dividend income received 842 1,039 Interest expenses paid (1,318) (1,129) Income taxes paid (25,518) (24,118) Net cash provided by operating activities 82,888 114,562 Cash flow from investing activities Payments for purchase of time deposits (298) (25) Proceeds from withdrawal of time deposits 2,443 － Payments for purchase of property, plant and equipment (29,838) (31,866) Proceeds from sale of property, plant and equipment 1,315 32 Payments for purchase of intangible assets (8,763) (9,456) Payments for purchase of financial instruments (1,243) (572) Proceeds from sale of financial instruments 21,440 － Payments for business acquisition (119,191) (2,217) Payment for acquisition of shares of subsidiaries due to (49,380) － changes in the scope of consolidation Others (0) － Net cash used in investing activities (183,517) (44,105) Cash flow from financing activities Proceeds from short-term borrowings 120,000 － Repayment of short-term borrowings (58) (120,000) Proceeds from long-term borrowings 29,640 119,638 Repayment of long-term borrowings (19,460) (7,759) Proceeds from issue of corporate bonds 29,888 19,931 Payments for redemption of corporate bonds (40,000) － Proceeds from non-control interests 110 135 Finance lease payments (379) (232) Payments for repurchase of treasury stock (44,227) (6) Payments for dividends (14,518) (15,839) Net cash provided by financing activities 60,993 (4,132) Effect of exchange rate changes on cash and cash (2,246) (3,538) equivalents Net increase/(decrease) in cash and cash equivalents (41,880) 62,786 Cash and cash equivalents at the beginning of the year 146,927 105,046 Cash and cash equivalents at the end of the year 105,046 167,832

5. Segment information Reporting segment information Revenue and operating results of the reporting segments of the Group are described below.

For the fiscal year ended March 31, 2017

（Unit: Millions of yen）

Amount Adjustment recorded on Reporting Segment amount consolidated （Note 1） financial statements

Cardiac and General Blood Vascular Hospital Management Total Company Company Company

Sales revenue Revenue from sales 261,529 57,946 94,483 513,959 205 514,164 to external customers Segment Profit (Adjusted operating 67,334 24,444 15,173 106,952 (2,308) 104,643 profit) （Adjustment item） Amortization of acquired intangible (934) － (8,490) (9,425) － (9,425) assets Other non-recurring (7,441) profit or loss Operating profit 87.777 Finance income 709

Finance costs (13,228)

Share of profit/(loss) of investment (377) accounted for using the equity method Pre-tax profit 74,881

Other items Depreciation and 10,871 9,707 13,209 33,787 684 34,471 amortization Capital expenditure 19,859 8,600 8,720 37,180 3,994 41,175 (Note 1） Amounts in ‘Adjustment’ are as follows: (1) ¥205 million adjustment to Revenue from sales to external customers is proceeds from temporary staffing that is not attributable to reportable segments. (2) ¥(2,308) million segment profit in “Adjustments” includes, “inventories” of ¥(775) million and “others” of ¥(1,532) million. (Note 2）“Other non-recurring profit or loss” mainly includes acquisition related costs. (Note 3）Amortization expenses of acquired intangible assets in business combination are included in “Amortization of acquired intangible assets”.

For the fiscal year ended March 31, 2018

（Unit: Millions of yen） Amount Adjustment recorded on Reporting Segment amount consolidated (Note 1） financial statements Cardiac and General Blood Vascular Hospital Management Total Company Company Company

Sales revenue Revenue from sales to 324,001 158,848 104,697 587,547 228 587,775 external customers Segment Profit (Adjusted operating 83,643 26,760 15,072 125,476 (547) 124,929 profit) （Adjustment item）

Amortization of acquired intangible (6,068) － (8,386) (14,455) － (14,455) assets Other non-recurring (1,921) profit or loss Operating profit 108,552 Finance income 1,089

Finance costs (2,792)

Share of profit/(loss) of investment accounted (218) for using the equity method Pre-tax profit 106,630

Other items

Depreciation and 17,522 9,657 14,359 41,539 495 42,035 amortization Capital expenditure 20,430 9,795 8,431 38,657 4,963 43,620

(Note 1） Amounts in ‘Adjustment’ are as follows: (1) ¥228 million adjustment to Revenue from sales to external customers is proceeds from temporary staffing that is not attributable to reportable segments. (2) ¥(547) million segment profit in “Adjustments” includes, “inventories” of ¥315 million and “others” of ¥(862) million. (Note 2）“Other non-recurring profit or loss” mainly includes acquisition related costs. (Note 3）Amortization expenses of acquired intangible assets in business combination are included in “Amortization of acquired intangible assets”.

(Note) Main products belonging to each business segment Business segments Sub-segments Main products

Angiographic guidewires, Angiographic catheters, Introducer sheaths, Vascular closure devices, PTCA Interventional Systems (TIS) balloon catheters, Coronary stents, Self-expanding peripheral stents, IVUS, Imaging catheters, etc. Cardiac and Vascular Company Neurovascular Neuro interventional coils, Stents, etc.

CV Systems Oxygenators, Cardio-pulmonary bypass system, etc.

Vascular Graft Artificial vascular grafts, Stent grafts

Infusion pumps, Syringe pumps, Solution sets, Syringes, I.V.solutions, Pain management systems, Nutritious food, Hospital Systems Adhesion barriers, Blood glucose monitoring systems, Digital thermometers, Blood pressure monitors, etc. General Hospital Company Contract development and manufacturing organization (CDMO) for Prefilled syringes, Devices to pharmaceutical Alliance companies for use in drug kits (Prefillable syringes, Needles for kit packaging business) , etc.

Blood bags, Automated blood collection system, Automated blood component processing system, Pathogen Blood Management Company － reduction technology, Automated, centrifugal apheresis system, Cell expansion system, etc.

6. First-time adoption of IFRS (1) Transition to financial reporting under IFRS The Group presents consolidated financial statements that comply with IFRS from the fiscal year ended March 31,2018. The most recent consolidated financial statements for fiscal year ended March 31, 2017 were prepared in accordance with generally accepted accounting principles in Japan (hereinafter “JGAAP”). The transition date was April 1, 2016. In principle, IFRS 1 requires that companies adopting IFRS for the first time (hereinafter “First-time Adopter”) apply the standards retrospectively. However, IFRS 1 provides certain mandatory exceptions and voluntary exemptions from the application of certain requirements under IFRS.

(2) Restrictions on retroactive application of other IFRS IFRS 1 prohibits retrospective application of certain IFRS standards. The group applies specific provisions for “Accounting estimates”, “Derecognition of financial assets and financial liabilities”, “Hedge accounting”, “Classification and measurement of financial assets”. The Group prospectively applies IFRS relating to those items from the date of transition to IFRS.

(3) Exemptions of other IFRS IFRS 1 provides certain mandatory exceptions and voluntary exemptions from the application of certain requirements under IFRS. The effects of the application of these requirements are adjusted in retained earnings or other components of equity at the date of transition. The exemptions that the Group applies in connection with the transition from JGAAP to IFRS were as follows:

(a) Business Combinations IFRS 1 provides that the First-time Adopter may elect not to apply IFRS 3 Business Combination (“IFRS 3”) retrospectively to past business combinations that occurred before the date of transition to IFRS. For retrospective application, all subsequent business combinations will be amended in accordance with IFRS 3. The Group adopts this exemption and elects not to apply IFRS 3 retrospectively to the business combinations that occurred before the date of transition. As a result, the amount of goodwill that arose from the business combinations that occurred before the date of transition is stated at the carrying amount of the goodwill in accordance with JGAAP. Impairment test on goodwill was performed as of the date of transition regardless of whether there was an indication of impairment or not.

(b) Deemed cost IFRS 1 provides that a first-time adopter is permitted to measure property, plant and equipment and intangible assets at fair value at transition date and use the fair value as deemed cost as of the transition date. The Group applies this optional exemption provision to certain property, plant and equipment and uses the fair value as deemed cost. The prior period book value is ¥16,240 million and the fair value is ¥7,320 million after applying deemed cost.

(c) Exchange differences on translation of foreign operations IFRS 1 provides that the First-time Adopter may elect to deem the cumulative translation differences for all foreign operations to be zero at the date of transition to IFRS. The Group applies this exemption and elects to deem the cumulative translation differences for all foreign operations to be zero at the date of transition and transfers all amounts to retained earnings.

(d) Designation of previously recognized financial instruments IFRS 1 provides that the First-time Adopter may determine the classification of financial instruments under IFRS 9 on the basis of the facts and circumstances that exist at the date of transition to IFRS. The Group designate equity securities as financial assets measured at fair value through other comprehensive income on the date of transition to IFRS.

(4) Adjustment from JGAAP to IFRS The Group has adjusted the amounts reported in the consolidated financial statements based on JGAAP when preparing consolidated financial statements based on IFRS. The effect of the adjustment on the financial condition, business performance and cash flow situation of the Group is as shown below. For "reclassification" in the reconciliation table, adjustments that do not affect retained earnings and comprehensive income are included in "Recognition and measurement differences” and items that affect retained earnings and comprehensive income. Furthermore, the Group acquired shares of Bolton Medical, Inc. and two other companies (making them subsidiaries of Terumo) and a related business as of 31 March 2017. Since the allocation of acquisition consideration was completed in the current consolidated fiscal year, the effect of the adjustment from the original provisional amount is stated in "Adjustment due to allocation of acquisition consideration".

Reconciliations of Equity as of April 1, 2016 (Transition Date)

（Unit: Millions of yen） Recognition and Accounts under JGAAP JGAAP Reclassification IFRS Notes Accounts under IFRS measurement differences

Current assets Current assets Cash and deposits 149,672 (2,745) ― 146,927 Cash and cash equivalents Notes and accounts 104,426 844 ― 105,270 Trade and other receivables receivables – trade Other current financial ― 3,152 (3) 3,149 assets ― 94,716 563 95,280 Inventories Merchandise and finished 59,132 (59,132) ― ― goods Work-in-progress 10,194 (10,194) ― ― Raw materials and supplies 27,126 (27,126) ― ― Deferred tax assets 14,963 (14,963) ― ― Other 10,621 (10,621) ― ― Allowance for doubtful (1,390) 1,390 ― ― accounts ― 2,106 ― 2,106 Current tax assets ― 5,872 (52) 5,819 Other current assets Total current assets 374,746 (16,701) 507 358,553 Total current assets

Non-current assets Non -current assets Property, plant and Property, plant and ― 177,532 (11,978) 165,554 A equipment equipment Buildings and structures 65,207 (65,207) ― ― (Net) Machinery, equipment 54,362 (54,362) ― ― and vehicles (Net) Land 23,297 (23,297) ― ― Lease assets (Net) 881 (881) ― ― Construction in progress 21,417 (21,417) ― ― Other (Net) 10,628 (10,628) ― ― Goodwill and intangible Intangible assets ― 291,592 3,175 294,767 B assets Goodwill 143,707 (143,707) ― ― Customer Relationships 90,750 (90,750) ― ― Developed Technology 28,017 (28,017) ― ― Other 28,038 (28,038) ― ― Investments and other

assets Investment securities 37,724 (37,724) ― ― Investments accounted for ― 5,961 (5) 5,955 using the equity method Other non-current financial ― 41,154 ― 41,154 assets Deferred tax assets 3,436 14,963 1,388 19,788 D Deferred tax assets ― 3,716 ― 3,716 Other non-current assets Other 14,186 (14,186) ― ― Total non-current assets 521,657 16,701 (7,420) 530,938 Total non-current assets Total deferred assets 5,281 ― (5,281) ― C Total assets 901,685 ― (12,194) 889,491 Total assets

(Unit: Millions of yen） Recognition and Accounts under JGAAP JGAAP Reclassification IFRS Notes Accounts under IFRS measurement differences Current liabilities Current liabilities Notes and accounts payable 36,294 18,413 777 55,485 Trade and other payables - trade ― 59,901 ― 59,901 Bonds and borrowings Short-term debt 61 (61) ― ― Current portion of long-term 19,839 (19,839) ― ― debt Other current financial Lease obligations 256 134 53 444 liabilities Current portion of bonds 40,000 (40,000) ― ― payable Income taxes payable 9,778 1,562 ― 11,341 Current tax liabilities Deferred tax liabilities 56 (56) ― ― ― 115 ― 115 Provisions Provision for bonuses 5,869 (5,869) ― ― Provision for directors' 170 (170) ― ― bonuses Notes and accounts 5,451 (5,451) ― ― payable-facilities Other 51,057 (7,172) (0) 43,884 G Other current liabilities Total current liabilities 168,835 1,506 830 171,172 Total current liabilities

Non-current liabilities Non -current liabilities ― 159,058 (1,885) 157,172 F Bonds and borrowings Convertible bonds with Other non-current financial 100,184 (100,184) ― ― subscription rights to shares liabilities Long-term debt 58,873 (58,873) ― ― Lease obligations 286 317 850 1,455 H Other financial liabilities Deferred tax liabilities 45,079 56 (5,587) 39,549 D Deferred tax liabilities Reserve for directors' 66 (66) ― ― retirement benefits Provision for directors' 8,656 ― 1,599 10,256 E Retirement benefit liabilities retirement benefits Asset retirement obligations 230 ― ― 230 Provisions Other 7,925 (1,813) 3,211 9,323 G Other non-current liabilities Total non-current liabilities 221,304 (1,506) (1,810) 217,987 Total non-current liabilities Total liabilities 390,140 ― (980) 389,160 Total liabilities

Total Net Assets Section Equity Capital stock 38,716 ― ― 38,716 Share capital Capital surplus 50,928 ― 1,550 52,478 F Capital surplus Treasury shares (64,040) ― ― (64,040) Treasury stock Retained earnings 419,573 ― 39,690 459,264 J Retained earnings Accumulated other 66,074 183 (52,454) 13,803 E,H,I Other components of equity comprehensive income Stock subscription rights 183 (183) ― ― Equity attributable to the 511,435 ― (11,213) 500,221 owners of the parent Non-controlling interests 109 ― ― 109 Non-controlling interest Total net assets 511,544 ― (11,213) 500,331 Total equity Total liabilities and net assets 901,685 ― (12,194) 889,491 Total liabilities and equity

Notes on reconciliations of Equity as of April 1, 2016 Recognition and measurement differences A Adjustment to property, plant and equipment The Group elects to use the fair value of certain property, plant and equipment on the IFRS transition date of the parent company as deemed cost. In addition, upon adoption of IFRS, the Group has revised the estimate of useful lives and residual values. As a result, there is a difference between the carrying amount of property, plant and equipment under JGAAP and the carrying amount under IFRS.

B Adjustment to intangible assets Certain development expenses that have been treated as expense under JGAAP are capitalized under IFRS if they meet the requirements for capitalization.

C Adjustment to deferred assets Under JGAAP start-up cost was capitalized as deferred assets. Under IFRS, the start-up cost is expensed as incurred.

D Adjustment to deferred tax assets and deferred tax liabilities Under JGAAP, deferred tax assets were calculated using the effective tax rate of the seller for the tax effect associated with the elimination of unrealized gains and losses, but IFRS calculates using the effective tax rate of the purchaser. In addition, deferred tax assets or deferred tax liabilities are recorded for temporary differences arising as a result of adjusting the differences to other IFRSs. Deferred tax assets have increased or decreased as a result of considering the recoverability of deferred tax assets based on IFRS.

E Adjustment to post-employment benefits Under JGAAP, actuarial gains and losses were recognized in other comprehensive income as incurred, and were recognized in profit or loss from the following of incurrence year, amortized on a straight-line method over a certain number of years no longer than the average remaining service period of employees. Under IFRS, these actuarial gains and losses are recognized in other comprehensive income as incurred, and immediately reclassified to retained earnings. Retirement benefit liabilities are recalculated based on the provisions of IFRS and any adjustments arising from such differences are reflected in the retained earnings. As a result of the recalculation based on IFRS regulations, significant assumptions relating to mortality rates differ between JGAAP and IFRS.

F Adjustment to bonds and borrowings Under JGAAP, convertible bonds with stock acquisition rights were recognized as a lump-sum amount, the consideration relating to the bond were not separated from the consideration related to the stock acquisition right. In IFRS, the liability component and the equity component are classified as a compound financial instrument. As a result, the amount measured as an equity element was deducted from bonds and borrowings, and the same amount is recorded as capital surplus.

G Adjustment to government grants Under JGAAP, revenue was recognized lump-sum when the government grant was received. Under IFRS, revenue deferred and a fixed amount of revenue is recognized over the useful life of the asset by recognizing incurred liabilities in other current liabilities or non-current liabilities.

H Adjustment to interest rate swap special method Under JGAAP, interest rate swaps were accounted for using special method if it fulfilled certain requirements. Under IFRS, the interest rate swap is accounted for using the cash flow hedge and the fair value of the hedge instrument is recognized in the consolidated statement of financial position.

I Adjustment to foreign operations The Group has elected to apply the exemption under IFRS 1 and transferred the total cumulated amount of foreign currency translation to the retained earnings as of the transition date.

J Adjustment to retained earnings Adjustment to retained earnings due to differences in recognition and measurement are as follows:

（Unit: Millions of yen）

As of April 1, 2016

Adjustment to property, plant and equipment (8,562)

Adjustment to intangible assets 1,441

Adjustment to deferred assets (3,596)

Adjustment to deferred tax assets and deferred tax 3,819 liabilities

Adjustment to post-employment benefits (14,881)

Adjustment to bonds and borrowings (257)

Adjustment to government grants (1,898)

Adjustment to foreign operations 63,742

Other (116)

Total 39,690

Reclassification The Group made reclassification in conformity with IFRS requirements, of which the significant ones are listed below: ・Under JGAAP, the Group included short-term time deposits with deposit terms exceeding three months in cash and deposits, but under IFRS they are included in other current financial assets. ・Under JGAAP, allowance for doubtful debts (current assets) are separately listed. Under IFRS, allowance for

doubtful debts are included in trade and other receivables as loss allowance. ・Financial assets and liabilities are presented in accordance with IFRS disclosure requirements ・Deferred tax assets and deferred tax liabilities recorded as current items under JGAAP are reclassified as

non-current assets/liabilities under IFRS.

・Under JGAAP, short-term borrowings and long-term borrowings scheduled for repayment within 1 year, and bonds scheduled for redemption within 1 year are included in bonds and borrowings. In addition, long-term debt and convertible bond type bonds with stock acquisition rights are included in corporate bonds and borrowings (non-current liabilities).

Reconciliations of Equity as of March 31, 2017

(Unit: Millions of yen） Adjustment Recognition allocation of and Accounts under JGAAP JGAAP Reclassification IFRS Notes Accounts under IFRS acquisition measurement consideration differences

Current assets Current assets Cash and cash Cash and deposits 105,388 ― (341) ― 105,046 equivalents Notes and accounts Trade and other 109,508 ― 1,581 ― 111,090 receivables - trade receivables Other current ― ― 625 ― 625 financial assets ― ― 105,497 549 106,046 Inventories Merchandise and finished 69,765 246 (70,011) ― ― goods Work-in-progress 9,367 ― (9,367) ― ― Raw materials and 27,579 ― (27,579) ― ― supplies Deferred tax assets 17,501 ― (17,501) ― ― Other 11,503 28 (11,531) ― ― Allowance for doubtful (1,430) ― 1,430 ― ― accounts ― ― 750 ― 750 Current tax assets ― ― 7,485 (110) 7,375 Other current assets Total current assets 349,183 275 (18,963) 438 330,934 Total current assets

Non-current assets Non -current assets Property, plant and Property, plant and ― ― 184,517 (11,872) 172,644 Ａ equipment equipment Buildings and 63,310 ― (63,310) ― ― structures (Net) Machinery, equipment 53,359 ― (53,359) ― ― and vehicles (Net) Land 22,471 ― (22,471) ― ― Lease assets (Net) 1,780 ― (1,780) ― ― Construction in 30,445 ― (30,445) ― ― progress Other (Net) 11,754 (66) (11,687) ― ― Goodwill and Intangible assets ― ― 455,009 16,607 471,616 B,C intangible assets Goodwill 217,334 (10,157) (207,176) ― ― Customer 85,338 897 (86,235) ― ― Relationships Developed Technology 105,581 10,658 (116,239) ― ― Other 46,463 (2,132) (44,330) ― ―

Investments and other assets

Investment securities 12,463 ― (12,463) ― ― Investments ― ― 5,540 176 5,717 accounted for using the equity method Other non-current ― ― 12,479 1,171 13,651 J financial assets Deferred tax assets 6,727 ― 17,501 (209) 24,019 E Deferred tax asset Assets related to 757 ― (757) ― ― retirement benefits Other non-current ― ― 4,437 (757) 3,679 assets

Other 10,263 ― (10,263) ― ― Total non-current assets 668,052 (801) 18,963 5,114 691,328 Total non-current assets Total deferred assets 4,169 ― ― (4,169) ― D Total assets 1,021,405 (526) ― 1,383 1,022,262 Total assets

(Unit: Millions of yen) Adjustment Recognition allocation of and Accounts under JGAAP JGAAP Reclassification IFRS Notes Accounts under IFRS acquisition measurement consideration differences Current liabilities Current liabilities Notes and accounts Trade and other 38,451 ― 21,923 777 61,152 payable - trade payables ― ― 127,853 ― 127,853 Bonds and borrowings Short-term debt 120,000 ― (120,000) ― ― Current portion of 7,853 ― (7,853) ― ― long-term debt Other current financial Lease obligations 231 ― 84 54 370 liabilities Income taxes payable 9,688 ― 1,427 ― 11,115 Current tax liabilities Deferred tax liabilities 23 ― (23) ― ― ― ― 212 ― 212 Provisions Provision for bonuses 6,317 ― (6,317) ― ― Provision for directors' 190 ― (190) ― ― bonuses Notes and accounts 7,059 ― (7,059) ― ― payable-facilities Asset retirement 72 ― (72) ― ― obligation Other 58,502 256 (9,418) 93 49,433 H Other current liabilities Total current liabilities 248,389 256 566 925 250,137 Total current liabilities

Non-current liabilities Non -current liabilities ― ― 210,713 (378) 210,335 G,J Bonds and borrowings Bonds payable 30,000 ― (30,000) ― ― Convertible bonds with subscription rights to 100,135 ― (100,135) ― ― shares Long-term debt 80,578 ― (80,578) ― ― Other non-current Lease obligations 230 ― 9,928 565 10,724 I financial liabilities Deferred tax liabilities 47,501 (782) 23 (6,648) 40,093 E Deferred tax liabilities Reserve for directors' 14 ― (14) ― ― retirement benefits Provision for directors' Retirement benefit 6,803 ― ― 1,846 8,650 F retirement benefits liabilities Asset retirement 84 ― ― ― 84 Provisions obligations Other non-current Other 18,113 ― (10,504) 3,103 10,712 H liabilities Total non-current Total non-current 283,462 (782) (566) (1,510) 280,602 liabilities liabilities Total liabilities 531,851 (526) ― (584) 530,739 Total liabilities

Total Net Assets Section Equity Capital stock 38,716 ― ― ― 38,716 Share capital Capital surplus 50,928 ― ― 1,550 52,478 G Capital surplus Treasury shares (108,225) ― ― ― (108,225) Treasury stock Retained earnings 459,261 ― ― 54,317 513,578 L Retained earnings Accumulated other Other components of 48,464 ― 307 (53,898) (5,126) F,I,J,K comprehensive income equity Stock subscription 307 ― (307) ― ― rights 19

Total equity attributable 489,452 ― ― 1,968 491,421 to the owners of the parent Non-controlling 101 ― ― ― 101 Non-controlling interest interests Total net assets 489,554 ― ― 1,968 491,522 Total equity Total liabilities and net 1,021,405 (526) ― 1,383 1,022,262 Total liabilities and equity assets

Notes on reconciliations of Equity as of March 31, 2017 Recognition and measurement of differences A Adjustment to property, plant and equipment The Group elects to use the fair value of certain property, plant and equipment on the IFRS transition date of the parent company as deemed cost. In addition, upon adoption of IFRS, the Group has revised the estimate of useful lives and residual values. As a result, there is a difference between the carrying amount of property, plant and equipment under JGAAP and the carrying amount under IFRS.

B Adjustment to goodwill Under JGAAP, goodwill was amortized on the straight-line basis over the period during which the effect of such goodwill lasts but does not exceed 20 years after recognition. Under IFRS, goodwill is not amortized

C Adjustment to intangible assets Certain development expenses that have been treated as expense under JGAAP are capitalized under IFRS if they meet the requirements for capitalization.

D Adjustment to deferred assets Under JGAAP start-up cost were capitalized as deferred assets. Under IFRS, the start-up cost is expensed as incurred.

E Adjustment to deferred tax assets and deferred tax liabilities Under JGAAP, deferred tax assets were calculated using the effective tax rate of the seller for the tax effect associated with the elimination of unrealized gains and losses, but IFRS calculates using the effective tax rate of the purchaser. In addition, deferred tax assets or deferred tax liabilities are recorded for temporary differences arising as a result of adjusting the differences to other IFRSs. Deferred tax assets have increased or decreased as a result of considering the recoverability of deferred tax assets based on IFRS.

F Adjustment to post-employment benefits Under JGAAP, actuarial gains and losses were recognized in other comprehensive income as incurred, and were recognized in profit or loss from the following of incurrence year, amortized on a straight-line method over a certain number of years no longer than the average remaining service period of employees. Under IFRS, these actuarial gains and losses are recognized in other comprehensive income as incurred, and immediately reclassified to retained earnings. Retirement benefit liabilities are recalculated based on the provisions of IFRS and any adjustments arising from such differences are reflected in the retained earnings. As a result of the recalculation based on IFRS regulations, significant assumptions relating to mortality rates differ between JGAAP and IFRS.

G Adjustment to bonds and borrowings Under JGAAP, convertible bonds with stock acquisition rights were recognized as a lump-sum amount, the consideration relating to the bond were not separated from the consideration related to the stock acquisition right. In IFRS, the liability component and the equity component are classified as a compound financial instrument. As a result, the amount measured as an equity element was deducted from bonds and borrowings, and the same amount is recorded as capital surplus.

H Adjustment to government grants Under JGAAP, revenue was recognized lump-sum when the government grant was received. Under IFRS, revenue deferred and a fixed amount of revenue is recognized over the useful life of the asset by recognizing incurred liabilities in other current liabilities or non-current liabilities.

I Adjustment to interest rate swap special method Under JGAAP, interest rate swaps were accounted for using special method if it fulfilled certain requirements. Under IFRS, the interest rate swap is accounted for using the cash flow hedge and the fair value of the hedge instrument is recognized in the consolidated statement of financial position.

J Adjustment to integrated treatment of cross currency interest rate swap (special treatment/ allocation treatment) Under JGAAP, interest rate currency swaps that fulfill the requirements for integrated treatment (exceptional treatment, allocation treatment) were treated as one unit. Under IFRS, cross currency interest rate swap is accounted for using the cash flow hedge method and the fair value of the hedging instrument is recognized in the 21

consolidated statement of financial position.

K Adjustment to foreign operations The Group has elected to apply the exemption under IFRS 1 and transferred the total cumulated amount of foreign currency translation to the retained earnings as of the transition date.

L Adjustment to retained earnings Adjustment to retained earnings due to differences in recognition and measurement are as follows:

（Unit: Millions of yen）

As of March 31, 2017

Adjustment to property, plant and equipment (8,508)

Adjustment to goodwill 11,430

Adjustment to intangible asset 2,608

Adjustment to deferred assets (2,840)

Adjustment to deferred tax assets and liabilities 1,601

Adjustments to post-employment benefits (11,301)

Adjustment to bonds and borrowings (462)

Adjustment to government grant (1,881)

Adjustment to foreign operations 63,742

Other (71)

Total 54,317

Reclassification presentation In addition to the above classifications, the Group made reclassifications in conformity with IFRS requirements, of which the main reclassifications are as follows: ・Under JGAAP, the Group included short-term time deposits with deposit terms exceeding three months in cash and deposits, but under IFRS they are included in other current financial assets. ・Under JGAAP, allowance for doubtful debts (current assets) are separately listed. Under IFRS, allowance for

non-current assets/liabilities under IFRS.

Reconciliations of Profit and loss and other comprehensive income for the fiscal year ended March 31, 2017

(Unit: Millions of yen) Adjustment Recognition Accounts under allocation of and JGAAP Reclassification IFRS Notes JGAAP acquisition measurement consideration differences

Net sales 514,164 ― ― 514,164 Revenue Cost of sales 236,164 4,495 (330) 240,329 A Cost of sales Gross profit 278,000 (4,495) 330 273,835 Gross profit Selling, general and Selling, general and administrative 201,421 (4,430) (13,703) 183,288 A,B administrative expenses expenses ― 2,746 42 2,789 Other income ― 6,755 (1,196) 5,559 C Other expenses Operating income 76,578 (4,074) 15,272 87,777 Operating profit Non-operating income 2,057 (2,057) ― ― Non-operating 10,083 (10,083) ― ― expenses Extraordinary income 16,442 (16,442) ― ― Extraordinary expenses 10,012 (10,012) ― ― ― 16,501 (15,792) 709 D Finance income ― 12,791 436 13,228 Finance costs Share of the profit/(loss) of investments accounted ― (559) 182 (377) for using the equity method Income before income 74,981 673 (774) 74,881 Profit before tax taxes Total income taxes 20,867 673 (1,552) 19,989 D Income tax expenses Profit 54,114 ― 777 54,891 Profit for the year Attributable to Loss attributable to Non-controlling non-controlling (111) ― － (111) interests interests（-） Profit attributable to 54,225 ― 777 55,003 Owners of the parent owners of parent

(Unit: Millions of yen) Adjustment Recognition Accounts under allocation of and JGAAP Reclassification IFRS Notes JGAAP acquisition measurement consideration differences Profit 54,114 ― 777 54,891 Profit for the year Other comprehensive Other comprehensive income income Items that will not be

reclassified to profit or loss Changes in financial assets Unrealized gains on measured at fair value (14,601) ― 13,189 (1,412) D other securities through other comprehensive income Adjustment amount Remeasurements of defined related to retirement 4,465 ― (1,495) 2,969 E benefit plan benefits Items that will be reclassified to

profit or loss Foreign currency Exchange differences on translation (6,931) ― 609 (6,321) translation of foreign adjustment account operations Deferred hedge (546) ― 67 (479) Cash flow hedges gains ― 33 33 Costs of hedging Share of other Associates comprehensive income/(loss) accounted for using (0) ― ― (0) of investments accounted for the equity method using the equity method Other comprehensive Total other (17,615) ― 12,404 (5,211) income /(loss) for the year, net of comprehensive income tax Total comprehensive income for Profit 36,498 ― 13,182 49,680 the year Total comprehensive income for (Details) the year attributable to Comprehensive income attributable to 36,616 ― 13,182 49,798 Owners of the parent the owners of the parent Comprehensive income attributable to (118) ― ― (118) Non-controlling interests the non-controlling interests

Notes on adjustment to profit or loss and comprehensive income for the fiscal year ended March 31, 2017 [Difference in recognition and measurement]

A Property, plant and equipment Under JGAAP, property, plant and equipment is depreciated in the same way as Japanese tax law and the residual value and useful life are based on Japanese tax law provisions. Under IFRS, property, plant and equipment is depreciated based on residual value and estimated useful life. As a result, cost of sales decreased by ¥121 million and selling, general and administrative expenses increased by ¥38 million.

B Goodwill Under JGAAP, goodwill was amortized on the straight-line basis over the period during which the effect of such goodwill lasts but does not exceed 20 years after recognition. Under IFRS, goodwill is not amortized, resulting in a decrease of ￥11,247 million in selling, general and administrative expenses.

Deferred assets C Under JGAAP, the start-up costs that were capitalized as deferred assets are treated as expenses when incurred by

IFRS. As a result, other expenses decreased by ¥1,111 million.

Equity financial instruments D Under JGAAP, the Group recognizes gains or losses on sales of investment securities in profit or loss. Under

IFRS, equity instruments are required to be designated as fair value through other comprehensive income and fair

value changes are recognized in other comprehensive income, resulting in a decrease in finance income by

¥15,792 million. In addition, income taxes on the gain on sale are included in other comprehensive income,

resulting in a decrease in income tax expenses by ¥2,823 million.

Remeasurement of defined benefit plan E Under JGAAP, incurred actuarial gains or losses are allocated proportionally using straight-line method over a

fixed number of years within the average remaining service period of employees and a proportional amount is

expensed in the following period. Under IFRS, actuarial gains or losses are recognized as other comprehensive

income and immediately transferred to retained earnings.

[Reclassification]

Under JGAAP, items are presented in non-operating income, non-operating expense and extraordinary gain,

extraordinary losses. Under IFRS, financing-related items are included in finance income and finance costs and

non-financing related items are included in other income, other expenses or share of the profit/(loss) of

investments accounted for using the equity method.

Note on Reconciliation of Cash Flows for the fiscal year ended March 31, 2017 There are no significant differences between the disclosed consolidated statement of cash flows under JGAAP and the disclosed consolidated statement of cash flows under IFRS.